Sumitomo Heavy Industries
6302.TMEDIUMNuclear Medicine / Fusion · Weight: 4%· Data as of 2026-05-14
Investment Thesis
World's largest cryocooler manufacturer — irreplaceable in ITER fusion (confirmed procurement), MRI superconducting magnets, semiconductor ion implanters, and emerging quantum computing pre-coolers. Q1 FY2026 Mechatronics OP +40% YoY with SHI explicitly citing semiconductor cryocooler demand recovery in US and China. NeuCure BNCT cancer treatment: 3 Japan clinical sites + first overseas install (China Hainan, FY2025 target); Dec 2024 orphan device designation for glioma/meningioma dramatically expands TAM. Trading at PBR ~0.96x (below book) with a strong ¥1,158B (+24% YoY) order backlog providing multi-year revenue visibility. New demand vectors: liquid hydrogen zero-boil-off (hydrogen society) and quantum computing pre-coolers (5,000+ units/yr needed by 2027).
Risk
Logistics & Construction segment (cranes, excavators) OP -45% FY2025 and -40% Q1 FY2026 due to US tariff impact and heavy equipment cycle normalization — drags blended margins. FCF turned negative in FY2025 (-¥2.3B vs prior +¥11B); capex elevated during mid-term plan investment phase. Mid-term OP target ¥80B for FY2026 now looks out of reach (only ¥60B guided — 25% below target). ROE ~5% below cost of equity; ROIC ~3.5% vs 7% target. ITER first plasma delayed to 2035.
Monitoring Trigger
BNCT: if additional Japan hospital contract announced, add 1-2%. Cryocooler: if Q2 FY2026 Mechatronics OP sustains >+20% YoY growth, upgrade to MEDIUM-HIGH. L&C: if US tariff costs not abating by Q2 FY2026 (Aug results), flag as structural drag. FCF: if FY2026 full-year FCF remains negative, reduce position weight.
Key Dates
Update History
Q1 FY2026 strong (OP +19.6%). Cryocooler recovery confirmed (Mechatronics +40%). But FCF negative FY2025, L&C tariff drag, midterm target shortfall. BNCT orphan device Dec 2024. HOLD maintained.
Key Metrics
Business Segments
| Segment | Revenue | Share | Description |
|---|---|---|---|
| Mechatronics | ¥200B | 19% | Cryocoolers (ITER, MRI), injection molding machines |
| Industrial Machinery | ¥350B | 33% | Cyclotrons, accelerators, forging presses |
| Logistics & Construction | ¥280B | 26% | Cranes, excavators |
| Energy & Lifelines | ¥240B | 22% | Power turbines, water treatment |
Supply Chain Evidence
| Evidence | Customer | Product | Detail |
|---|---|---|---|
| confirmed | ITER Organization | Cryocoolers for fusion reactor cryogenic system | ITER assembly ongoing (vacuum vessel + central solenoid integration, Apr 2026). First plasma now 2035. SHI is specified cryocooler supplier. Ongoing procurement.[source](2026-05-01) |
| confirmed | KEK (J-PARC) and JAXA | Cryocoolers for particle accelerators and satellites | SuperKEKB and J-PARC facilities. JAXA satellite applications (~60 years heritage).[source](2025-01-01) |
| confirmed | Semiconductor manufacturers (US and China) | Cryocoolers for ion implanters and cryo-pumps | Q1 FY2026 Mechatronics OP +40% YoY; SHI cited semiconductor cryocooler demand recovery in US and China as key driver.[source](2026-04-28) |
| confirmed | Hospitals (NeuCure BNCT) | BNCT accelerator-based cancer treatment system | 3 clinical sites in Japan. First overseas: Hainan Boao Lecheng, China (planned FY2025 operations). Orphan device designation Dec 2024 for glioma/meningioma.[source](2024-12-01) |
| probable | GE HealthCare / Siemens Healthineers (MRI) | GM-type cryocoolers for MRI superconducting magnets | SHI is world #1 in GM cryocoolers; GE/Siemens are dominant MRI OEMs. Stable recurring demand. |
Sources & References
Peer Comparison
| Company | PE | Fwd PE | ROE | Op Margin | FCF |
|---|---|---|---|---|---|
| IHI Corporation | 23.7 | 22 | 26.8% | 8.8% | +¥68B |
| Hitachi | 28.96 | 27.58 | 13.65% | 11.1% | +¥1,390B |
| Japan Steel Works | 33.5 | 31.1 | 9.09% | 8.4% | -¥19.7B |
| Yokogawa Electric | 38.8 | 23.8 | 11.5% | 13.7% | +¥44B |
| Fuji Electric | 20.3 | 17.7 | 11.8% | 10.3% | +¥51B |
| Kanadevia | 10.97 | 11 | 5.2% | 1.9% | -¥22.6B |
| Organo Corporation | 27 | 27 | 21.7% | 20.6% | +¥19B |
| Kurita Water Industries | 22.3 | 21.8 | 6.8% | 12.4% | +¥25B |
| Sumitomo Heavy Industries | 19.3 | 18 | 5.0% | 4.8% | -¥2.3B |
| Toyo Tanso | 23.2 | 23.8 | 5.7% | 14.6% | -¥5.8B (capex phase) |
| Okano Valve | 21.6 | 8.2% | 10.1% | +¥624M | |
| Kobe Steel | 8.7 | 8.5 | 7.2% | 4.8% | N/A |
| Ebara | 30.9 | 25.4 | 15.8% | 12.1% | -¥51.5B (capex) |
| Stella Pharma | -9.8% | -23.6% | N/A | ||
| Teikoku Denki | 10.49 | 9.5 | 12% | 18% | N/A |